By Fay Niewiadomski
Today’s leaders are faced with a multitude of disruptions, whether it’s technological shifts from the acceleration of AI or global economic volatility brought on by events like the COVID-19 pandemic. In such a context, command-and-control styles of leadership reliant on predictable outcomes have become ineffective. Now is the time to reimagine leadership – redefining what intelligence looks like and how this distinguishes from simply ‘knowledge’.
How AI is redefining the future of leadership decisions
How can leaders predict the unpredictable and lead effectively when they cannot see what’s coming next? The answer lies in a powerful duality: establishing an unwavering strategic direction while empowering tactical discretion within clearly defined boundaries. This replaces predictability with transformative thinking, symbiosis with AI and new decision-making configurations.
Transformation requires operational understanding:
Human intelligence is the ability to understand context, use emotional intelligence and judgment of consequences to determine the best approach in specific situations. Intelligence is not to be confused with knowledge, the gathering and classification of facts, principles, theories and practices from various disciplines. Psychology Today describes “successful leaders as having high social intelligence, the ability to embrace change, inner resources such as self-awareness and self-mastery, and above all, the capacity to focus on the things that truly merit their attention.”
AI is not a substitute for human intelligence. AI is a tool to be used by humans for streamlining execution, accelerating decision making, empowering creativity and innovation and elevating team collaboration and impact. The examples below demonstrate human wisdom and good judgment. AI may or may not have been used as an accelerator or an enabler.
Strategic Direction and “Red Lines”
Strategic perspective is the destination. It is the “why” that exists beyond the immediate chaos. A specific quarterly goal like “increase sales by 10%,” can be rendered meaningless by a sudden market crash. Strategic direction provides a filter for all decisions.
“We need to remain both profitable and ethical within our industry”, is an example of a non-negotiable pillar. In a crisis, a company guided by this might forgo a highly profitable but ethically dubious opportunity (e.g., price gouging during a shortage) because it violates a core “red line.” Conversely, it might pursue an ethically sound but initially costly initiative (e.g., protecting employee health) because it aligns with being a sustainable and respected enterprise.
Microsoft’s Cloud-First Transformation
When Satya Nadella took over as CEO in 2014, the tech landscape was uncertain. Microsoft’s legacy Windows-centric model was under threat. Nadella didn’t predict every new gadget or app; he established a new strategic direction: “to empower every person and every organization on the planet to achieve more.” More concretely, he bet the company on being a “cloud-first, mobile-first” provider. This strategic clarity meant divesting from businesses like Nokia that no longer fit this destination and making massive, unwavering investments in Azure cloud infrastructure. The destination was clear, even if the exact path to get there wasn’t.
Agile Tactical-Discretion
If strategy is the destination, tactics are the daily choices of speed, direction, and route. In uncertainty, these must be agile, contextual, and often decentralized. Leaders cannot possibly have all the answers at the top. Instead, they must create boundaries within which their teams can make smart, rapid decisions.
This means clearly communicating the “red lines” (what we never do) and the “guardrails” (the principles that guide what we should do). For a company like Patagonia, a red line might be “we will never source materials from suppliers that use forced labor.” A guardrail might be “always prioritize product durability and repairability to reduce environmental impact.” With these boundaries set, a product design team has the discretionary power to experiment with new materials or business models (like its acclaimed Worn Wear program) without needing executive approval for every minor decision, as long as they stay within the agreed framework.
Netflix’s Pivot to Streaming
Netflix’s original strategic direction was to be the best DVD-by-mail service. But leadership, seeing the uncertainty of physical media’s future, clarified a new, broader direction: “to become the best global entertainment distribution service.” This strategic clarity is what allowed them to make an incredibly difficult tactical decision: to cannibalize their own highly profitable DVD business to invest in a nascent, unproven streaming platform. They didn’t know if streaming would work, but they knew their destination was distribution, not just DVDs. This discretionary move, made within the boundary of their strategic direction, is what made them a dominant force.
Implementing the Framework in a Crisis
The COVID-19 pandemic was a masterclass in this leadership model. Companies with rigid, top-down structures faltered. Those that thrived often did so by leveraging clarity and discretion.
Restaurants and Retail: A fine-dining restaurant’s strategic direction was “to provide an exceptional culinary experience and be a pillar of our community.” Overnight, its tactical reality changed. Its “red lines” might have been “never compromise on food quality” and “do not lay off staff if avoidable.” With these boundaries, management empowered employees to make tactical decisions: chefs designed take-out kits, servers became delivery drivers, and maître d’s launched online marketing campaigns. They had the discretion to experiment with new revenue models (meal kits, grocery staples, virtual classes) because leadership had set a clear direction and defined what was off-limits.
The leader’s role, therefore, shifts from being the sole decision-maker to being the chief clarifier. They must:
- Relentlessly Communicate the “Why”: Repeat the strategic destination until it becomes the organizational culture.
- Co-Create the Boundaries: Involve key stakeholders in defining the “red lines” and guardrails to ensure buy-in and shared understanding.
- Empower and Trust: Delegate tactical decisions to the people closest to the problem and the customer, and create a culture where safe-to-fail experimentation is encouraged.
- Create Feedback Loops: Establish mechanisms to learn quickly from the outcomes of those discretionary decisions, adapting the tactics and even refining the boundaries as new information emerges.
- Use AI to Streamline and Accelerate: innovation, operations, execution and decision making.
Leading into the unknown means building a resilient and adaptive organization, providing unwavering clarity on the destination and the rules of the journey. That’s how leaders empower their teams to make thousands of small decisions that, together, chart a successful path.
Fay Niewiadomski is a strategic leadership advisor, founder and CEO of ICTN, a global consultancy delivering leadership and cultural transformation programmes since 1993, and the author of Decisions That Matter.
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